The Real Cost of Amazon Compliance Mistakes in 2026

Chris: [00:00:00] Hey everybody. Welcome back to Seller Performance Solutions. We're welcoming Leah McHugh back with a compliance chat and Roundup from, let's just say your last maybe month plus of interesting case work and also just kinda catching up post-holiday with what we see, what we're concerned about, what we see people making mistakes on that.

I don't really think people can afford to make mistakes like that. Because if you had to guess, how much have people lost in revenue by the time they email you? Is it two weeks worth? Is it four weeks worth? Is there an average?

Leah: No. It's sort of all over the place. Some people email me immediately and some people try to deal with it themselves for like six months.

Chris: So yeah, I meant to have an episode maybe two weeks ago, just about all the money lost from botched reactions, [00:01:00] assessments to appeals work. I didn't end up recording that because I thought it would be too depressing, but I think it's still worth talking about if you make right the right decision in the first one or two moves you make when an ASIN is about to be cut down or it has already been deactivated, it can make all the difference in the world.

Now you're doing a mix of those. Some people. Already lost the listing. Some are about to lose it, right?

Leah: Yeah. So if it's just like a compliance check, like a standard check, then they usually are given time to, to submit the documentation before the ASIN gets taken down. Whereas if it's been flagged as a restricted product or say, flagged for a safety concern, then usually the ASIN is already down by the time I'm working on it.

Chris: And sometimes it's just they set the wrong document. Or they just didn't have anything to send and they just find something else to send. Is that really still a thing?

Leah: Yeah, there's [00:02:00] mistakes on both sides though. 'cause Amazon does still sometimes ask for documentation that doesn't exist or documentation that has absolutely nothing to do with the product. 'cause they've misflagged it as something else. So sometimes Amazon is asking for things that you can't provide. But then the other side of that is that sometimes they are asking for legitimately required documentation for that product.

And if the seller doesn't have it, they just send in whatever they have. Or sometimes they don't have the complete documentation, and so they just send in partial documentation, which just gets rejected.

Chris: They don't have it because they weren't expected to be asked for it, or they never had it, or they only had some of it because they had an improper understanding of what Amazon might ask for like where does it even begin?

Leah: It's a combination. So sometimes sellers just aren't aware of the compliance requirements for the products that they sell. But the other side of that is, is particularly for resellers or say a product that has batteries and then you're not the manufacturer of the battery, but the [00:03:00] product still requires those batteries.

A lot of sellers don't necessarily have the test reports for those components because it's not something that they manufacture. So sometimes they'll have, say, a UL certificate, but not the testing to go with it. And Amazon requires the testing now.

Chris: Yeah. I just, there's so much content spilled on these topics when people say I didn't know this was required. It just makes me think like, did they fail to designate a compliance person internally? Did they work with the wrong agency? Did they read the wrong content? Did they watch the wrong YouTube video? Like how is that? From my perspective, it's years later and we're still seeing those same things.

Are they all just so brand new? I mean, what is the real reason that, 'cause we talked about this at the start of every year, what's going to be different this year versus last year?

Leah: [00:04:00] So there's different requirements, right? Some of these are legal requirements that Amazon is checking, and then some of them are Amazon specific requirements.

Both of those things change over time.

Chris: Yeah.

Leah: Uh, you know, Reese's Law relatively new, not that new. Did come into effect in, I think, 20. 22, if I'm not mistaken. But still have people who are not familiar with the changes from that, and then also people who are just new to selling that particular product or just have never been asked for the compliance requirements and didn't know that they were required.

But you have a lot of different areas of law for different products. Plus, on top of that you have Amazon Policy, Plus on top of that, sometimes Amazon requests documentation that doesn't actually explicitly say is required in their policy, but then they require it to reinstate after a safety complaint.

Chris: Yeah, and then we see wacky takes on appeals, I guess because people are calling support and asking them for opinions and they just get [00:05:00] whatever, or they call account health. I'm still trying to figure out where some of the ideas to inject different bits of content into either a case or an email or a submission through Seller Central, where those ideas come from.

Is it coming from amazonians, you don't know who wanna say something? Or is it coming from online content somewhere?

Leah: I think part of it is that sellers have just been so trained that everything requires a plan of action. That without anybody asking for a plan of action, they will still submit plan of action type information.

I regularly see that for compliance cases and the compliance team does not ever want a plan of action. All they wanna see is that the product is compliant or not. And then the other side of that is that there's you, a lot of the times, there's two options here. One is disputing the requirement and one is providing the information requested.

And so a lot of sellers don't fully understand the difference between those things. A lot of times they don't even realize that they're agreeing that they did something wrong, when they think that they're appealing that they didn't do anything wrong. So a [00:06:00] combination. Sometimes it's sellers not knowing, sometimes it's bad advice from the account health team. I'm sure the account health team regularly tell people to write a plan of action still, even though most cases I think at this point don't require a plan of action.

Chris: I thought it was like the messaging they were sending the wrong message, which mentioned a plan of action, not.

No, for compliance clients, not so much that somebody was telling them on a call. I mean, account health, I guess. Yeah, they tell people all kinds of things, but the plan of action stuff I thought wasn't really coming in a call so much anymore.

Leah: I haven't, not that I recall anyway, I haven't seen any compliance type notifications that mentioned a plan of action.

Chris: Yeah. So what do you think happens when people fall for this gimmick or. This kind of bait and switch technique about legal teams, oh, it's compliance, so it involves legal. So I'm gonna write a letter to legal for you. And it goes to legal to die, but does it die harmlessly or does it spin things in a different direction when it comes [00:07:00] to, I mean, first of all, compliance teams and legal teams, are they interacting sitting in the same room too often?

No.

Leah: No, not really. I mean, the compliance team is technically a part of the legal team I guess, but, um, but it's not, yeah. They're not, it's not, generally speaking, the compliance team that's responding to these cases aren't even legally trained really.

Chris: The question really, is when people send these snail mail letters to . How many cases have you done? How many times have you talked to compliance reps who were like, well, we saw that you wrote to our legal teams on such and such a date, whether it's an email or letter, whatever. And that was read and processed, and that turned this into a different type of case, or it went in a different direction?

I mean, I never, ever hear that.

Leah: No. I mean, if anything, if you preemptively send a legal letter that doesn't have a good basis, you're actually just making it less likely that any of the other teams are gonna touch it.

I also, I don't take cases if somebody's [00:08:00] already written a letter to legal, because it's usually too much damage done at that point.

Chris: I mean, I've taken some, when I've restricted the damage to no one cared. You lost time. They ignored this and I'm able to figure that out. But I'm just curious if any anything's ever been volunteered. I see legal letters that volunteer inaccurate info sometimes because it's copied and pasted from a template for a different client.

And that creates confusion around the product or compliance issues, but not even copy and paste errors, just citing the wrong policies, trying to get this or that person in legal to look at it even though they're not on the compliance side of legal.

Leah: Yeah, I mean, I've seen a lot of badly written legal letters.

That's why I usually don't take those cases because again, once it's in legal's hands, no other team's gonna wanna touch it. And if you submitted bad information to the legal team, [00:09:00] it's not like they're gonna suddenly start taking you seriously when you get your stuff together enough to send them the correct information.

Chris: I mean, I guess the encouraging sign is they actually read some of these things in the past. You'd be like, I don't know, did they even read this? Did they even open it? Now we see messages where they're like quoting it back to you. So they clearly read it.

Leah: I'm not saying that there's never a place to escalate to legal. I escalate to legal, but I would only ever do that when I am very firm on the legal basis of the escalation. Not just a grumpy letter on a lawyer's letterhead that you think is gonna scare Amazon into replying even though it's factually incorrect.

Chris: That's it. It's the factually incorrect. That's right. That, that I know is

Leah: that's where it, that's where it does damage.

Chris: Yeah. If you want to talk about the Never Recorded, probably won't record episode about Top Q4 Mistakes that were percolating last couple months in my head. One of them was [00:10:00] factually incorrect letters sent to legal just for the sake of it or to make it look like something's happening. And the stack is growing of people coming to us, with compliance related issues that are just being ignored. And I think the reason is because they're sending it to the wrong place and they're sending the wrong stuff.

And then the third strike is sending it too many times, wrong place, wrong analysis and letter composed based on misinformation, and then sent in like spam style.

Leah: Yeah. I think the biggest mistake there is sending in bad information. You don't really wanna be going to what is essentially the final say on this with bad information.

Chris: Yeah.

Leah: Which again is why I generally don't take those cases if somebody's already sent in a bad letter to the legal team, because now we're not just trying to get the compliance team to properly review something. We're also trying to get [00:11:00] everybody to ignore the fact that you sent a bunch of bad information to legal.

Chris: Yeah, those are tough. We all have to do those, ignore everything up until this point. Right. I've done a few of those lately. Those are getting, those are hard, but it's,

Leah: There's a difference between not crafting a good appeal versus sending an angry legal letter to the legal department that's completely incorrect.

Chris: Yeah. I mean, and I'm hoping against hope that this year things will be different on some of these fronts, but part of that problem is people hiring somebody who has to justify the price tag. By showing work was completed. It's just not work that has.

Leah: Well, and you know, when I take a compliance case, I don't immediately take the case.

I have to see information before I take it to know that there is actually a case there. If you're hiring a lawyer who doesn't ask you for any of that information, probably not a good sign.

Chris: I'm talking about the people that don't ask any questions, see?

Leah: Right. That is my point. Like I don't just take these cases.

I need [00:12:00] information to know if this is fixable or not. So if you're not being asked that information, then any letter that they give you is probably not going to be accurate. Yeah.

Chris: Yeah. Another,

Leah: how could it be if they don't have the information?

Chris: Another peeve, I'm like hijacking this episode and turning it into the the non episode episode that I didn't do three weeks ago.

Leah: That's fine. I'm jet lagged.

Chris: But the other, that's the other peeve was how often, especially this Q4, I think more than any other Q4 people answering my questions told me. No one ever asked me this, no one I hired previously ever asked me.

Any of these questions before?

Leah: Yeah, I mean, I've had people who are like, I've learned more from your one email than from of dealing with somebody else on this.

Chris: I know. So I know. I think we have some testimonials and service reviews that say that about you but even just basic 1, 2, 3 questions, things that wouldn't take time to ask things that you could just have in a template that you could ask almost anyone who pays you [00:13:00] hadn't been asked.

It's just like, is that gone? No one does any diagnostic anymore. It's just kind of like, oh, well, we'll take a try.

Leah: Well, yeah, I think that's part of it. I mean, I don't take cases unless they're fixable and a lot of people don't care.

Chris: Well, I mean, but people that you don't take still have to try to fix something and damage control, you know?

Leah: Well, yes and no. If their product does not meet any of the legal requirements, that's. I can't really help them get that reinstated unless it meets the legal requirements.

Chris: Yeah. Yeah. I'm hoping this year to steer things back to compliance. I'm hoping we don't have as many people who say, people that we ruled out as clients because they had nothing that they needed to get their product back up.

Fewer people coming back to us like, oh yeah, we got that fixed. Yeah. We're selling those.

Leah: Well, so there's always, always, like it was unfixable when they got fixed. I mean, Amazon's teams always make mistakes, right? Yeah. But also, sometimes I send [00:14:00] people away to get the documentation. It's not that it can never be fixed, it's just we need to get the documentation first.

Chris: No, I mean, I'm talking about people that never got the documentation.

Leah: Yeah. We come back, mean Amazon makes this, oh yeah.

Chris: We, we, we made it through that. That was.

Leah: Amazon makes mistakes all the time. I mean, that's,

Chris: yeah. Can't hang your hat on it.

Leah: Normal. That's not surprising. It does kind of annoy me though when I do a lot of work on something and it, it gets rejected for no reason.

But then somebody's that should definitely not be reinstated. Gets reinstated. Especially when it's like, because it's an unsafe product and they're just like, Ugh. Well, it's reinstated it.

Chris: I see. I see it more with reviews abuse suspensions, where chronic abusers are like, yeah, we got that reinstated.

Oh yeah, it was our third time getting caught. And then somebody else who's a first time offender, Amazon's like, Nope. Due to the severity, you're never selling again.

Leah: No one has ever said that they treat everybody the same.

Chris: And no one ever will.

Leah: No.

Chris: And on that note,

Leah: hello. Amazon PR team.

Chris: Yeah, we'll come back.

We'll come [00:15:00] back to that. Well, I mean, maybe next week we can do a bit more compliance cases from the trenches that you've seen the last few weeks because it's a new year. Q4 is long gone.

Leah: I guess I forget that you know what I see all the time. Other people don't see all the time. 'cause I'm just like, yeah, it's the same.

Chris: I know what you see all the time. I can promise any listener nobody wants to see what you see all the time. I don't want to see it. And I work here.

Leah: It's true.

Chris: So anyway, thanks everyone for listening in. We'll come back to you next week with more wonderful insights from me and possibly Leah.

Leah: Maybe.

Chris: If she's not jet lagged.

And, uh, we'll, we'll take it from there. Onwards and upwards, January of 2026. Catch you next time. Bye bye.